Perspectives Blog

Ahead of the trends – Washington update on retirement savings initiatives

Columbia Management Learning Center , | July 31, 2014

Various federal government initiatives, including tax reform, will impact the way Americans save for retirement. Trends to watch include enforcement, pension de-risking and participant empowerment measures. Staying current on changes can help you identify critical retirement savings decision points. Retirement security is the financial issue that is most disconcerting to Americans.* Likewise, the current administration has concluded the U.S. i…

U.S. rates — View update

Zach Pandl, Portfolio Manager and Strategist | April 4, 2014

…ed up, and is now four tenths above its level in December. Average hourly earnings growth also slipped to 2.1% year-over-year. However, we would caution against reading too much into a single jobs report. Based on demographic trends, we estimate that “breakeven” payroll growth—the amount needed to lower the unemployment rate—is around 75-100k per month. If job growth continues around 200k per month, it’s very likely the unemployment rate will kee…

Missing links and multipliers

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | June 9, 2014

…h student debt. This was underscored recently by a New York Fed study* which showed that young people with student loans were much less likely to invest in houses than those without loans, which is a reversal of pre-recession trends. They believe this is one reason why the housing recovery has not been stronger. When you restrict credit in the midst of a 100 basis point rise in interest rates and a 13% jump in home prices, affordability is invari…

Retail sector outlook – It’s a share game

Mari Shor, Senior Equity Analyst | March 17, 2014

expenditures) versus non-durables. Even within non-durables categories, the ongoing spending shift towards accessories and away from apparel can be expected given less favorable weather through summer, less democratic fashion trends in the marketplace and a lack of seasonality in consumers’ wardrobes. With both structural and cyclical headwinds facing many apparel retailers today, we believe that global brand strength and supply chain expertise w…

Hanging in

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | September 20, 2013

Recent retail sales data are well below expectations and probably an indication that consumers have become more cautious about spending. Financial conditions matter greatly, and the recent tightening is likely having some impact on housing activity and consumer attitudes. Spending follows wages and it will be difficult for retail spending to gain much traction with the tie to shallow compensation trends. The best one can say about consumer spe…

What to expect from Janet Yellen’s testimony

Zach Pandl, Portfolio Manager and Strategist | February 10, 2014

…ics community is closing in on a rough consensus. This week’s report from the Congressional Budget Office (CBO) is a typical example. The authors estimate that two thirds of the decline in the participation rate since 2007 is structural, and one third “arose from temporary weakness in employment prospects and wages.” They add that the employment-to-population ratio will peak at just 58.9% in 2017—just one tenth above the level in January—before t…

Slack and inflation

Zach Pandl, Portfolio Manager and Strategist | July 21, 2014

Today’s low unemployment rate indicates modest slack in labor market, which implies earlier Fed rate hikes and/or more inflation risk. The decline in labor force participation in recent years now looks mostly structural. Investors should remain cautious around U.S. interest rate risk despite a solid first half of 2014. Excerpted from Zach Pandl’s newest whitepaper Structural weakness in labor force participation means there is less slack in th…